Richard Thaler has always been an interesting figure in economics, and there is a lot to learn from the recently released memoir detailing his professional life, which Thaler appropriately titled “Misbehaving.” Thaler, now tenured at the University of Chicago, has long provided a number of insights into behavioral economics, and there is a great deal investors can learn from these insights. This is especially true for those who do not realize how human nature affects every aspect of the decision-making process, including those related to our investments and long-term financial plans.

Perhaps the most important lesson is to understand how we make decisions based on the way a situation is framed. Thaler uses a number of examples to show how irrational we are with regard to financial matters, using simple situations such as an individual who would not pay $10 to have his lawn mowed by someone else but would also not accept $20 to mow a neighbor’s lawn. There are obvious human errors in the way we value the things, and the way these things are framed is often the sole determining factor. For another example, a patient who is told that they have a 95 percent chance of surviving a surgery is much more likely to go ahead with the procedure than the person who is told that there is a 5 percent chance of dying.

So what does all of this have to do with finance? Well, it is necessary to understand how information is presented to us and to make decisions based on the actual information rather than the manner of presentation. This requires a willingness to thoroughly evaluate each opportunity, and it also requires that we begin to place more trust in the advanced metrics that eliminate presentation and focus solely on the pure data available. As humans, we like to believe that we are able to think rationally at all times, but there are too many times in which we make poor decisions –- financial or otherwise –- due to the way our choices are presented to us.

In reading Thaler’s book, it is clear that we have a lot to learn. Understanding how we make decisions and the manner in which we are affected by behavioral economics is key to overcoming our own inherent flaws. The process through which we overcome these flaws is quite difficult, but it is ultimately worthwhile for ensuring consistently sound financial decisions.

Consumer demand has been pushing a great deal of technological change in recent years, and that demand is finally making its way into the financial sector. The development of a number of financial technology services has made it easier for consumers to manage their finances in a manner that they are able to completely control. As a result, traditional banking institutions are being forced to adapt quickly or risk being forced out of the marketplace entirely. This is a positive development, as the enhanced transparency for consumer finance will ultimately stimulate a great deal of change in the way financial services are delivered.

There are a few obvious examples –- Paypal, for instance — of financial technology companies establishing a significant hold on the market recently, and these companies are not just making financial management more convenient for consumers, as they are also changing the way financial institutions do business entirely. It seems clear that consumers will no longer be dealing with a single financial institution to handle all of their financial needs; instead, consumers will be able to identify the most ideal platform for their specific financial goals and will be able to invest accordingly.

Companies such as Robinhood and Simple have made it easier for consumers to control their personal finances and to modify the options at their disposal so that they are suitable for their unique goals and needs. It is therefore the case that these financial technology startups are not just making personal finance easier and more accessible, but they are also creating a highly personalized option that makes money management more effective over both the short- and long-term.

Of the most interesting developments among these financial technology startups is the advent of the robo-adviser, which has threatened to make personal investment corporations seemingly obsolete. The robo-advisement process is quite simple, as the automated system invests according to your goals and input with regard to diversification, much in the same way as a personal finance manager would but without the added costs.

The world of finance is clearly changing, and technology startups are finally entering the financial world to stimulate the kind of change that is long overdue. The services that are now being offered by these tech startups will ultimately prove to be exceptionally beneficial to consumers who want more convenient and effective personal finance options, and it is now up to the established financial institutions to either adapt or dissolve.